Ron Haynie is senior vice president
of mortgage ;nance policy at the
Independent Community Bankers
of America (ICBA). He provides leadership and guidance for ICBA on all
mortgage ;nance-related legislative
and regulatory issues that impact
community bankers. Haynie has
more than 35 years of experience
in mortgage lending and banking.

He spent 20 years at Freddie Mac in
a variety of roles, including sales,
mortgage-backed security trading,
credit policy and program development. He also has worked in
the correspondent and wholesale
mortgage business.

Ron Haynie

Community banks are carving out their spacein the mortgage market

Big banks get much of the attention, but the nation’s small, community banks play a key role in the economy —
and its housing market. And although they often compete with mortgage brokers, these small banks also are
facing the same issues as brokerages. Regulatory changes, in particular, have impacted banks and promise to
do so throughout 2016. Ron Haynie, senior vice president of mortgage ;nance policy for the Independent Community Bankers of America, spoke with Scotsman Guide about community banks’ role in the mortgage industry
and several of the biggest issues facing the industry today.

How are independent community banks faring within the mortgage realm?

Some are doing pretty well; I’m not going to deny that. They’ve taken advantage of the fact that a lot of other
players fell out of the business, especially in smaller markets. A lot of players abandoned small markets, so it was
an opportunity for them, for the banks that remained, to take that market share. There are some that are doing
it, and they’re being pretty successful with it. There are others that got burned in the mortgage business in the
last go-round. … That, combined with the increased cost of all the mortgage regulations that have come down,
some of them are saying, “We’re getting out. It doesn’t make any sense for us to be in this business, and we don’t
do enough loans to make a di;erence, or at least to justify the costs.”

Are those costs one of the biggest challenges these banks are facing?

I think that’s a big factor in it. A lot of times ... residential mortgage lending is something that they do to accommodate their customers, and they want to be able to o;er it. But the cost to o;er it, even for loans that they
would retain in portfolio, it’s signi;cant. And that cost is only getting higher. It makes it very di;cult for small
lenders, for small community banks, to be able to do that business and survive.

How is the crackdown on marketing-services agreements (MSAs) affecting your members?

In one sense, this change will actually help community banks, because there are real estate o;ces that community banks can’t even get into, because there is an agreement in place with another mortgage lender. In that
sense, it will open up some opportunities for some community banks to be able to get in and possibly expand
their client base with Realtors. On the other hand, what’s troubling is that, there are certainly situations where
some folks use MSAs where it’s a brokering relationship, but yet there’s a lot of support that’s done by that particular entity. … Is that safe? Is that a problem with [the Real Estate Settlement Procedures Act]? You just don’t
know with referral relationships.

Our message to community banks is, you’ve got to get away from the referral business. If you’re going to generate revenue from mortgage transactions, you’re going to have to be really in the business. You’re going to have
to be originating the loans, processing them and submitting them to a wholesaler.

How would you classify the relationship between community banks and the mortgage industry, andhow has it changed in recent years?

The two industries, the two groups, have always competed against each other, and that’s ;ne. This is America,
and people compete. We compete against credit unions. We compete against the big guys. We compete against
the regional banks. That’s ;ne, and whoever does the best job and has the best value proposition is going to
win. That’s sort of the American way.

It’s more about ;nding a way for everybody to live in peace, and I think they can. You get away from competing
against the big, national players, and I think everybody is kind of in the same bucket. They’re trying to make a go
of it, whether you’re an independent community bank or you’re a mortgage broker. If you’re a mortgage broker
and you’re running a two-man shop or three-man shop, you’re trying to deal with compliance issues. You’re
trying to make sure that you get fairly compensated on a deal that you originate, and that you’re competitive,
all those things. And it’s tough. n